On Monday the Saudi king said his country will donate $1 billion to help rebuild the Gaza Strip damaged severely by the Israeli offensive.

King Abdullah told Israel that an Arab initiative offering peace will not remain on the table forever.

King Abdullah's comments at an Arab economic summit in Kuwait City were his first since Israel and the Palestinian group Hamas declared a fragile cease-fire to halt three weeks of violence in Gaza that killed more than 1,250 Palestinians.

Israel has to understand that the choice between war and peace will not always stay open and that the Arab peace initiative that is on the table today will not stay on the table, said Abdullah during a speech according to the Associated Press.

The initiative, which was first proposed by Saudi Arabia in 2002 and relaunched in March 2007, offers Israel collective Arab recognition in exchange for Israeli withdrawal from territory it occupied in the 1967 war, the establishment of a Palestinian state with Jerusalem as its capital and a just solution for the problem of Palestinian refugees.

The proposal was initially rejected by Israel, but in the past year has said it could be a starting point for discussion.

Progress towards finalizing the peace deal has however been slow, especially after Hamas seized Gaza from its rival Fatah in June 2007, creating a rift between the two main Palestinian factions. Palestinian President Mahmoud Abbas' faction, Fatah, controls only the West Bank.